Author: CJAC.org

THE WALL STREET JOURNAL
Tuesday, March 23, 2010 As of 1:03 PM EDT
LETTERS TO THE EDITOR

Asbestos Lawyers California Bound

Out here in California we see fraud-convicted Mississippi asbestos lawyers (“Asbestos Turnabout,” Review & Outlook, March 18) William Guy and Thomas Brock simply guilty of bad timing and picking the wrong state to double-dip for damages.

Here they could have sued, collected and then gone after duplicate compensation from one of the many bankruptcy trusts already set up by defendants.
That way there would be no chance of courtroom disclosure and no repercussions when they made their second scoop.

Other asbestos lawyers know this and are making about the only business in-migration California is seeing these days.

Judges in larger counties here, where asbestos cases eat up the civil calendar and courtrooms go dark one day a month in the budget crisis, are beginning to sense the injustice and extra workload fostered by the double-dip scam.

John H. Sullivan
President
Civil Justice Association of California

Sacramento, Calif.

CJAC says state needs more jobs, not more lawsuits, calls on lawmakers to enact reforms
LOS ANGELES – A new national study released today found that California continues to be one of the least-balanced states in the nation when it comes to dealing with lawsuits – which the Civil Justice Association of California warned jeopardizes the state’s economic recovery.
The report by the U.S. Chamber Institute for Legal Reform found that California’s lawsuit climate was ranked 46th in the nation, down from 44th in 2008, the last time the survey was taken.
CJAC President John H. Sullivan said the most troubling part of this ranking is the negative impact the state’s legal climate has on job creation.
“California policy makers should take this study’s message very seriously,” Sullivan said. “When two-thirds of the top attorneys at large companies say that a state’s litigation climate is likely to affect business decisions, it must be noted that these attorneys are among the company’s leaders who make these decisions – decisions that affect location, expansion, and jobs.
“At a time when California continues to grapple with one of the highest unemployment rates in the country – and a chronic state budget deficit of some $20 billion a year – job creation and economic growth has to be our top priority. It’s high time that policy makers take a serious look at fixing the issues that make California such a magnet for lawsuit abuse.”
The study found that 67 percent of respondents said the litigation environment would make it less likely that their companies would locate or do business there, with 42 percent saying it would be “very unlikely” their firms would do so.
The report was based on a survey of 1,482 in-house general counsels, senior litigators or attorneys, and other senior executives knowledgeable about litigation matters at companies with at least $100 million in annual revenues. The survey was conducted by Harris Interactive, one of the oldest and most prestigious polls in the world.
The survey was formally released in Huntington Park, a working-class suburb south of downtown Los Angeles, at a restaurant owned by an immigrant from Mexico who has been the victim of numerous shakedown lawsuits for alleged violations of the Americans with Disabilities Act.
Sullivan noted that lawsuit abuse seriously affects large and small businesses alike.
“When it comes to excessive litigation’s effects on jobs and economic health, there’s no real economic division between large and small business. If class action lawsuits drive a large company to reduce its exposure in California, the many small businesses that produced goods and services for that company and its employees are going to suffer. Likewise, a small business forced to devote time and money to fighting shakedown disability-access suits is going to see its costs go up – leading to price increases that affect large businesses and their employees,” he said.
The study found that California received an overall score of 47.2 out of 100 on 10 issues affecting litigation. Delaware received the most favorable ranking with a score of 77.2, followed by North Dakota, Nebraska, Indiana, and Iowa.
The four states ranking lower than California were Alabama (45.5), Mississippi (40.0), Louisiana (39.6), and West Virginia (35.1).
In all, 43 states earned scores of 50 or higher, and 27 states earned scores of 60 or above.
The survey also asked respondents which jurisdictions have the least fair and reasonable litigation environments. Chicago was ranked the worst, followed closely by Los Angeles and the state of California generally. San Francisco was found to be the sixth-worst jurisdiction.

The Civil Justice Association of California is a non-profit, membership supported coalition of citizens, taxpayers, businesses, local governments, professionals, manufacturers, financial institutions, insurers, and medical organizations. Founded in 1979, CJAC is the only statewide association dedicated solely to improving California’s civil liability system. It is active in both the Legislature and the courts, working to reduce the excessive and unwarranted litigation that increases business and government expenses, discourages innovation, and drives up the costs of goods and services for all consumers. For more information, visit www.cjac.org.

Non-election year contributions bring total trial lawyer contributions to candidates and incumbent officeholders to more than $35 million since 1999

SACRAMENTO – Personal injury and other plaintiffs’ lawyers hit the $1 million mark in political contributions to incumbent state officials and candidates for office during 2009, according to data compiled by the Civil Justice Association of California (CJAC).

During the year leading up to the legislative and statewide elections in 2010, trial lawyers gave $567,000 to incumbents and candidates for statewide office and $464,000 to Senate and Assembly candidates and officeholders. Political action committees controlled by plaintiffs’ attorneys gave $272,000, but contributions from individual lawyers and their firms totaled nearly three times as much – $759,000.
The 2009 contributions brings the total given by trial lawyers to California statewide and legislative officeholders and candidates to just under $35.2 million since the 1999-2000 election cycle, according to CJAC’s calculations, which are based on campaign finance reports filed with the Secretary of State’s office.
This figure greatly exceeds the $8.8 million in trial lawyer campaign contributions during the past decade that was contained in a study* released Wednesday by the Fair Political Practices Commission. The FPPC listed the trial lawyers as the 25th largest special interest group in total spending on influencing government decisions but its calculations included money spent lobbying officials while omitting contributions made to candidates and incumbents from lawyers, their firms, and family members. Those latter contributions made up 71 percent of the total given.
“The bottom line is that personal injury lawyer and other plaintiffs’ lawyer money is enormous by any measure, especially given the contributors’ narrow focus of promoting their litigation industry,” said CJAC President John H. Sullivan. “The lion’s share of trial lawyer money going to candidates and office holders comes directly from individual lawyers and their firms, not trial lawyer campaign committees. Therefore, these lawyers’ ongoing attempt to influence our government is far greater than even the high level documented by the FPPC and most others attempting to track campaign dollars.”
During 2009, the bulk of the trial bar’s contributions to statewide candidates went to Attorney General Jerry Brown, who is running virtually unopposed for the Democratic nomination for governor, and to two Democratic candidates each for attorney general and insurance commissioner.
During 2009, trial lawyers gave Brown’s campaign $142,300.
In the race to succeed Brown as attorney general, the plaintiffs’ lawyers gave $53,800 to former L.A. City Attorney Rocky Delgadillo and $51,600 to San Francisco District Attorney Kamala Harris.
In the contest for insurance commissioner, they contributed virtually the same amount to two candidates – $78,000 to Assemblyman Dave Jones of Sacramento and $71,300 to Assemblyman Hector de la Torre of South Gate. Eleven percent of Jones’ contributions and 7 percent of de la Torre’s funding last year came from trial lawyers.
In Senate races, five Democratic candidates have received $10,000 or more from trial lawyers, led by incumbent Mark DeSaulnier of Concord, who has received $19,600, which is 15 percent of his total contributions. The other top recipients of trial lawyer money were Assemblywoman Mary Salas, who is running in a San Diego-area Senate district, and Senator Mark Leno, who is running for re-election in San Francisco. Salas, who is running against fellow Assemblyman Juan Vargas, has received $15,200 (5 percent of her total), while Leno has picked up $14,900 (also 5 percent of his total).
Five candidates for the Assembly – again, all Democrats – have received $10,000 or more in trial lawyer contributions, led by Betsy Butler, a former fundraiser for the plaintiff attorneys’ lobbying group, who has received a staggering $68,300 (26 percent of her total) in her race for an open seat in Los Angeles County. Two other Democratic candidates have received $20,000 or more – Richard Gordon, who is running in a Silicon Valley district – and incumbent Mike Feuer from Los Angeles.
Sullivan said that while political contributions are a legitimate part of our freedom to communicate and select government representatives, the public should be informed when a powerful special interest is conducting a massive program to elect representatives purely in the interest of pursuing its own narrow agenda.

More information – as well as a breakdown of contributions to each candidate and incumbent – is available on CJAC’s web site

• Big Money Talks: The 15 Special Interests That Spent $1Billion to Shape California Government, State of California Fair Political Practices Commission, March 2010

SACRAMENTO – The Civil Justice Association of California (CJAC) today urged state legislators to support a bill that will eliminate rules that unfairly penalize public and private defendants for appealing civil trial decisions to a higher court.

Senate Bill 1117, authored by Senator Mimi Walters (R-Laguna Niguel) and sponsored by CJAC, would ensure that defendants pursuing legal appeals would pay interest on judgments at a rate comparable to market rates during the appeals process, not the fixed 10 percent currently set by state law.

“Although the issue seems obscure, the current process makes defendants think twice about appealing because if they lose the appeal, the amount of money owed to the plaintiffs can jump by as much as 20 percent,” said CJAC President John H. Sullivan. “For example, if the appeal of a $1 million judgment took two years to complete and was unsuccessful, a defendant would owe an additional $200,000.”

Interest accrues on judgments from the time they are awarded by the trial court until collected by the plaintiff. Since 1982, the interest rate in California prejudgment and postjudgment interest has been fixed at the rate of 10 percent per year. The bill would set the judicial interest rate at the federal short-term rate plus 2 percent. During the past few years, the short-term rate has fluctuated between half a percent and about 5 percent.

Sullivan noted that by supporting SB 1117, legislators will send a message that the state is becoming friendlier to job-creating business investment, and also benefit cash-strapped state and local governments.

“The current system is a financial boon to plaintiffs’ lawyers and a hit on taxpayers,” Sullivan said. “In these difficult economic times, this prudent proposal would not only be recognized by business decision-makers, but would benefit cities, counties, and other public entities which are struggling with budget shortfalls.”

At least eight states have recognized that high locked-in judicial interest rates that are far higher than current interest rates are not fair to defendants and don’t make economic sense. Alaska, Florida, Illinois, Michigan, New Jersey, Ohio, Texas, and Washington have adopted legislation basing the judicial interest rate on rates set by the Federal Reserve or the United States Treasury, plus a certain number of percentage points.

A similar bill, SB 393, was introduced by Senator Tom Harman (R-Huntington Beach) last year but failed passage.

SACRAMENTO – The Civil Justice Association of California today announced the introduction of a bill that would help California’s economic recovery by making legal damages fairer and more predictable, while protecting the compensation that injured parties receive in a lawsuit.

Assembly Bill 8X 40, authored by Assemblyman Roger Niello (R-Fair Oaks) and sponsored by CJAC, focuses on setting limits on punitive damages that can be added to the money an injured person receives to cover medical bills and related pain and suffering, property damage, lost earnings, and other actual losses.

“This bill is a fair, sensible solution to the problem of unpredictable jackpot awards, which drive up the cost of goods and services for all Californians and is yet another barrier to economic growth and job creation in a state that needs both,” said CJAC President John H. Sullivan.

The bill would limit punitive damages – which are meant to punish the defendant – to three times the amount of compensatory damages, or the actual damages that a person has suffered as a result of injury or harm. Currently, punitive damages can run from nothing to hundreds of millions of dollars at the whim of a judge or jury.

It also would prohibit an award of punitive damages when a product has been approved by a regulatory agency, unless a defendant has supplied misinformation or withheld information about the product. Under this provision, if a governmental agency approved a product that later injured someone, the maker of the product would still have to pay to compensate the injured party, but would not be punished with a punitive damages award.

In addition, the bill also would limit non-economic damages – damages for pain and suffering – to $250,000 in all civil cases.

This proposal is similar to the $250,000 limit on non-economic damages included in California’s Medical Injury Compensation Reform Act. For more than 30 years, that landmark reform measure has ensured that injured patients receive fair compensation while preserving their access to health care by keeping doctors, nurses, and other health care providers in practice and hospitals and clinics open.

“Neither justice nor economic vitality is served through excessive punitive legal extractions,” Assemblyman Niello said. “I am proud to partner with CJAC in offering the reasonable and fair approach of AB 8X 40.”

SACRAMENTO – The Civil Justice Association of California (CJAC) urges swift legislative action on a proposal introduced today that will stop the worst abuses of the state’s jumbled class action law, while still protecting the right of truly harmed Californians to have their day in court.
Assembly Bill 8X 38 would align California with the federal system and other states by giving judges clear statutory rules for handling class action cases and greatly reducing the legal uncertainty that makes these lawsuits expensive and time-consuming.
The bill – dubbed the Consumer Legal Remedies Act – was authored by Assemblywoman Audra Strickland (R-Thousand Oaks) and sponsored by CJAC, and will bring much-needed clarity to class action law and help counter the states competing with us for good jobs.
“This bill strengthens California law,” said CJAC President John H. Sullivan. “It will stop the game playing and uncertainty that results under current state law, while protecting the class action remedy in cases where it’s appropriate.”
The bill would replace California’s Section 382 of the Code of Civil Procedure (enacted a century and a half ago) with a comprehensive statutory framework for class actions.
California’s low legal climate ranking – as documented in several nationwide reports – affects the state’s ability to attract and retain businesses and jobs. The U.S. Chamber Institute for Legal Reform’s 2008 State Liability Systems Ranking Study put California in the bottom five states for the way it treats class action lawsuits.
In addition, 64 percent of business lawyers surveyed said a state’s litigation environment is likely to impact important decisions at their company, such as where to locate or do business.
State lawmakers have passed up several chances to improve California’s class action law. Assembly Bill 298, introduced early in the 2009-10 legislative session; AB 1905, introduced in the 2007-08 legislative session; and AB 1505, introduced in the 2005-06 legislative session, would have allowed defendants the ability to appeal the class certification decision. Assembly Bill 1505 also proposed other standards to bring increased clarity and fairness to California’s class action law.

Letters to the Editor Column

Jeffrey Lowe’s column, “Tort Reform ‘Savings’ Ring Hallow” (Dec. 30, 2009) on tort reform and the federal health care proposal was remarkable — for what it left out.

He failed to mention the report issued only last October by the nonpartisan Congressional Budget Office, which concluded that reforms including already-tested limits on malpractice jury awards, a statute of limitations on malpractice claims, and replacing joint-and-several liability with a fair-share rule, if implemented nationwide, could reduce total federal budget deficits by $54 billion over 10 years.

Mr. Lowe must have been aware of the Congressional Budget Office, because he cites the office’s five-year-old report on medical malpractice costs. He raises that report’s estimate of a 2 percent cost saving, which he dismisses as representing “only” $3.6 billion out of $2.3 trillion in total health care spending.

Even allowing for a portion of these legal-related totals going to legitimate compensation for patients, the billions still going into wasteful litigation and defensive medicine would buy, for example, a huge number of vaccines and medicines for our children for many years to come.

John H. Sullivan
President, Civil Justice Assoc. of California

By John H. Sullivan

Published December 30, 2009 in Capitol Weekly.

The 2010 legislative year opens with state lawmakers being forced to play yet another game of Whack-A-Mole.

The first mole of the season pops up on January 6 when the Assembly Insurance Committee considers a scheme to let private lawyers become self-deputized vigilantes and go after insurance companies to get damages and — no surprise — attorney’s fees.

Policing insurers has long been a task given solely to the attorney general, insurance commissioner, and district and city attorneys. This hasn’t been by accident. Government enforcement is conducted by lawyers who understand complex insurance regulations and whose mission is to protect the public. Policy makers — and the courts — have recognized the folly of pinning a badge on private lawyers whose priorities are understandably based on the prospects of making money on their “enforcement” ventures.

The public sees this too, as emphasized by the overwhelming approval in 2004 of Proposition 64, an initiative that stopped private lawyers from using a state consumer protection law to extort settlements from businesses.

Nevertheless, a handful of legislators ignoring the voters’ legal and political message have from time to time yielded to plaintiffs’ lawyers’ urging to give them new avenues to sue for profit.

This time, the lawyers are using laws governing senior insurance as their jumping off point. The January 6 attempt proposed in Assembly Bill 989 would allow lawsuits against insurance companies by anyone alleging to be harmed — including people who aren’t even policyholders.

It isn’t the only area in which plaintiffs’ lawyers are trying to expand their “private attorney general” status. They are attacking a long-respected case rule that protects government impartiality by prohibiting public prosecutors from hiring private lawyers on a contingency-fee basis.

Plaintiffs’ lawyers earlier hoped to team up with public prosecutors to circumvent Proposition 64, the Daily Journal legal paper noted at the time.

It didn’t happen. A spokesman for then-Attorney General Bill Lockyer told the paper that “It’s not a good idea having private lawyers running around with a badge.”

But that won’t stop them from trying. In 2010, lawmakers will no doubt be confronted with various plaintiffs’ lawyer-backed bills that will open up new areas of litigation. Meanwhile, the lawyers’ political machine in Sacramento will keep working to preserve laws that make California a haven for speculative lawsuits and a risky place for businesses to operate and create jobs.

California has enough troubles — a projected deficit of nearly $21 billion and a 12% unemployment rate, for starters — and adding more lawsuits to the mix won’t help improve the state’s economy, nor will it help attract businesses or retain those already here.

State legislators may want to take these facts into consideration when debating reforms that would help to reverse the perception that California is a sue-happy state.

They could start by making California’s class action law more fair and balanced. The state is stuck with vague class action rules that put it near the bottom nationally in a 2008 ranking for fairness and balance.

They could make changes to our state employment rules, which are causing confusion and litigation that businesses experience in no other state.

California’s lawyer-friendly system encourages plaintiffs’ attorneys to go over the top in finding new ways to sue more victims. Some firms are even moving to California to take advantage of our plaintiff-friendly asbestos litigation rules.

Earlier this year, a Los Angeles judge blasted a Texas-based plaintiffs’ firm for filing cases in other states, then dropping them and re-filing in California — a ploy that blocks defendants from getting important deposition information. Under California law, the judge could do nothing about what he called the “grisly game of asbestos litigation”and a “waste of the court’s time.”

Meanwhile, recent articles have been comparing California to Texas. Texas is home to more Fortune 500 companies than any other state, has an unemployment rate two percentage points below the national average, and was named by Chief Executive magazine as the best place to do business in America. One article predicted that other states will adopt legal reform measures pioneered in Texas: “Unlike California and other states, Texas has been aggressive in minimizing the enormous burden of frivolous lawsuits.”

Jobs and the economy suffer when a state’s litigation field tilts toward plaintiffs’ lawyers. State lawmakers should grab a mallet and wallop Assembly Bill 989, then focus on some affirmative ways to rein in abuses of our civil justice system.

***
John H. Sullivan is president of the Civil Justice Association of California, a non-profit, member-supported organization working to improve California’s civil justice system. More information is available at www.cjac.org.

But Several Bright Spots Stand Out in Recent California Court Decisions

SACRAMENTO — California has been listed first in the “watch” category of a national legal reform group’s annual “Judicial Hellholes” roundup of states where it’s especially likely — and risky — to be sued.

The American Tort Reform Association (ATRA) in making its announcement today said California is “on the cusp” and may in the future “fall into the Hellholes abyss or rise to the promise of equal justice under the law.” The ATRA review focuses on meritless lawsuits and laws that tilt the playing field in favor of plaintiffs’ lawyers.

“It’s hard to dispute the California ‘watch’ classification,” said Civil Justice Association of California (CJAC) President John H. Sullivan. “But over this past year there have been some positive court decisions, plus promising rule-making work going on by court administrators that holds promise of improvements in key areas such as asbestos litigation, faster trials, and overall court efficiency.”

“With the state facing a projected $20 billion shortfall by mid-2011 and forecasters projecting a double-digit unemployment rate into 2012, now is the time for state legislators, who really drive the litigation climate, to enact changes that will allow courts to be more efficient, improve the civil justice system for all litigants, and attract and retain business investment in the state,” he added.

Two California Supreme Court rulings provide examples of how the system is becoming more balanced:

• In November, the Court for the first time endorsed a cap on punitive damages, ruling 5-2 that anything more than a one-to-one ratio between compensatory and punitive damages would be unconstitutionally excessive (Roby v. McKesson, filed 11/30/2009).

• The Court last year gave manufacturing companies much-deserved protection against over-reaching product liability suits when it ruled that companies do not have to warn experts about products the experts are trained and hired to work with (Johnson v. American Standard, Inc., filed 4/3/2008).

Meanwhile, Sullivan said, state lawmakers will have a chance in the upcoming legislative session to make changes to put the state back on track to economic recovery. They could start by bringing balance to California’s class action law. They could also enact a law to bring the state’s judicial interest rate on appealed judgments up to date.

As Sullivan said: “These and some similar changes would make California a more attractive place for business investment which, in turn, will provide much-needed jobs for Californians.”

Read the full ATRA report at www.atra.org.

Contact: John H. Sullivan
916-443-4900
[email protected]

SACRAMENTO — The Civil Justice Association of California (CJAC) today praised the 8th U.S. Circuit Court of Appeals November 27 ruling that “holding name brand manufacturers liable for harm caused by generic manufacturers ‘stretch[es] the concept of foreseeability too far.’”

The decision is in stark contrast to a November 2008 California court of appeal decision that found Wyeth Pharmaceuticals liable for the plaintiff’s negative reaction to a medication used to treat stomach conditions — which Wyeth pioneered but no longer produced. The plaintiff in that case took a generic drug, manufactured and sold by a generic drug manufacturer, but sued Wyeth for failure to warn of risks associated with the drug.

Of the present case, CJAC President John H. Sullivan said, “the court got it right, showing a refreshing abundance of common sense in telling us that ‘Traditional products liability requires a plaintiff to show that she actually consumed the defendant’s product.’”

The 8th Circuit Court, in ruling the former name brand manufacturer could not be held liable for injuries caused by a generic competitor’s version of the drug, considered and rejected the appellate court’s holding in the California case (which the California Supreme Court refused to review).

“It makes no sense to tie a company’s product liability to a drug that it invented but has lost patent protection — and which the plaintiff was not taking when the injury occurred,” Sullivan said.

Read the opinion in Mensing v. Wyeth by clicking here. (Click the link and search for case number 08-3850.)

Contact: John H. Sullivan
916-443-4900

SACRAMENTO – Senator John Benoit (37th District) will be honored on Thursday, November 19, by the Civil Justice Association of California (CJAC) for his leadership during the 2009-10 legislative session.

“Having first-hand experience with many aspects of the legal system through my career in public safety, I have always had immense respect for the law and its important role in our society,” said Senator Benoit. “I am incredibly grateful for this prestigious honor. An effective and fair justice system requires the dedication and vigilance of all Californians.”

During this past legislative session, Benoit authored several bills that would improve California’s legal climate and help businesses, consumers, and taxpayers.

Senate Bill 39 was written in response to a California Supreme Court decision that stripped traditional liability protections from non-medical “Good Samaritans” and such volunteers providing non-medical help. The bill, which went into effect immediately, extended liability protections to any person providing help in good faith at the scene of an emergency.

Senator Benoit authored Senate Bill 187, which would have allowed employees to work four 10-hour days without being paid for overtime. This would have provided employees with flexibility and helped reduce the number of employment-related lawsuits. He also authored Senate Bill 807, which would have clarified the law on meal and rest break periods, benefitting employers and employees by reducing litigation in their area.

“Senator Benoit will receive our Civil Justice Leadership Award for his work and dedication in trying to bring fairness and balance to California’s civil justice system,” said CJAC President John H. Sullivan.

Kim Stone, CJAC’s vice president-legislation, added: “Senator Benoit’s constituents and all Californians are lucky to have him working in Sacramento to support the interests of consumers, businesses, and Good Samaritans, and to ease the burdens on our courts.”

Senator Benoit’s district is located entirely within Riverside County, encompassing more than 4,800 square miles and including more than 846,000 residents. On November 4, he was appointed by Governor Arnold Schwarzenegger to fill the 4th District Riverside County Supervisor seat and will be sworn into that position on December 1.

The Civil Justice Association of California annually recognizes lawmakers whose commitment to balance and fairness in California’s civil justice system benefits consumers, taxpayers, and businesses of all kinds.

Contact: John H. Sullivan, President
Cynthia Lambert, Director of Communications and Research
916-443-4900